How to Cook a Koch

Two of America’s outstanding snakes have pulled their own fangs

Around the time of the Bush Depression, the wold’s most powerful energy billionaires, influenced by a concept of rather feeble construction called ‘peak oil’, got together to decide how to react to the overwhelming evidence of global warming.  Led by British Petroleum, they were considering the possibility of getting behind the efforts to develop other energy sources, and to push for the inevitable switch to a hydrogen economy.

This effort was derailed by the most reactionary among them, led by the Koch brothers.  So instead, they doubled down on petroleum, using dangerous and expensive new technologies like fracking, oil sands and Arctic exploration.  They were confident that their efforts to lie about the runaway carbon cycle would prevail, and that as emerging economies struggle to adopt the wasteful ways of the West, their thirst for oil would only grow.  They invested hugely in these technologies, essentially betting their own and several world banks’ fortunes on what must have seemed a sure bet.

And even though nobody, including them, seems to have realized this yet – they lost.



We must stop here a moment to consider the nature of the petroleum market.  It works on such a long cycle – from exploration to development to getting into your car or your heater’s oil tank or the plastics and fertilizers we depend on can be a decade or longer, sometimes several decades.  Oil markets work on such long periods between investment and payoff that the big operators can go years, even a decade or more, while losing money, and still remain strong and wealthy.  Consider only a few years ago, when the big oil companies were making what seemed obscene profits, and the last few, when their profits have collapsed; that’s all perfectly normal for the industry.  Usually, the only people who get damaged are the small providers of oil-field technology and exploration; the big guys always do just fine, having designed their industry to work through gigantic profits and losses over long periods.  If these more recent crude oil price drops seem like they’d be trouble for the majors, they aren’t – or at least, they shouldn’t be.

But things haven’t gone that way.  The Kochs, among others, bet that even these new, challenging, expensive sources would be so necessary that the world would willingly pay the exorbitant prices needed for them to be profitably developed, no matter at what expense.  They bet that even if people became more interested in other technologies, particularly in electric vehicles, the change to new technologies would take decades.  They were sure their investment, by some measures the largest ever made in oil development, would pay off.  And they were right – at least, they should have been.

But something happened on their way to even greater wealth.  People, especially in those emerging markets, have been embracing new technologies much faster than anyone could have imagined.  Even though these technologies still represent just a fraction of the energy market, even a small reduction in the increase of consumption they expected can make all their profits disappear.  For the last two years, the ever-upward growth in oil demand changed.  Consumption was still climbing – but the upward curve was bent downward, ever so slightly; demand was slightly below expected growth.  Just a little.

Just enough to ensure these big players were going to take a huge hit. The world’s appetite for oil doesn’t need to end, or anything like it, for the biggies to take an overwhelming loss.  For the amounts of investments they’ve already made, it’s too late to pull back.  The oil market, for all its size and the huge profits it makes, runs on a very tiny margin.  That’s the chance they’ve taken; projected sales of these expensive new technologies would have ensured decades of profit even as the world turned away from petroleum – as long as change took long enough.  They bet on a growth curve that would – that should have – meant great rewards.  But even the small reduction in growth means their profits will just disappear.

So say goodbye to the Kochs, and their attempts to buy America’s political system.  They bet wrong.  They are still betting wrong.  They simply won’t have the vast wealth they’ve depended on to purchase their politicians.  Their time atop the pinnacle is ending, and so are they.  Their fangs are being pulled, and they’ve done it to themselves.

Would you like to help them end their continued attempts to take democracy for themselves?  Look to your own life.  Buy less of what they sell.  Change your own habits.  Help retire the Kochs.